Japan and EU to sign trade deal eliminating nearly all tariffs
The European Union and Japan are signing a widespread trade deal that will eliminate nearly all tariffs, seemingly defying worries over trade tensions triggered by US president Donald Trump's policies.
The deal will be signed in Tokyo, although this is largely a ceremonial exercise as the agreement was struck late last year.
It was delayed from earlier this month because Japanese prime minister Shinzo Abe cancelled going to Brussels over a disaster in south-western Japan caused by extremely heavy rainfall, with more than 200 people dying in floods and landslides.
European Council president Donald Tusk and European Commission president Jean-Claude Juncker will also attend a gala dinner at the prime minister's official residence.
Both sides are heralding the deal, which covers a third of the global economy and more than 600 million people.
Prices of European wine and pork will fall for Japanese consumers, while Japanese machinery parts, tea and fish will become cheaper for Europe.
The deal eliminates about 99 per cent of the tariffs on Japanese goods to the EU, but remaining at around 94 per cent for European imports into Japan for now and rising to 99 per cent over the years.
The difference is due to exceptions such as rice, a product which is culturally and politically sensitive and has been protected for decades in Japan.
The major step toward liberalising trade has been discussed in talks since 2013, but the timing of the signing is striking as China and the US are embroiled in trade conflicts.
The US is proposing 10 per cent tariffs on a $200 billion (£151bn) list of Chinese goods.
That follows an earlier move by Washington to impose 25 per cent tariffs on $34bn (£25bn) of Chinese goods. Beijing has responded by imposing identical penalties on a similar amount of American imports.
Besides the latest deal with the EU, Japan is working on other trade agreements, including a far-reaching trans-Pacific deal.
The partnership includes Australia, Mexico, Vietnam and other nations, although the US has withdrawn.
Japan praised the deal with the EU as coming from Mr Abe's "Abenomics" policies, designed to wrest the economy out of stagnation despite a shrinking population and cautious spending. Japan's growth continues to be heavily dependent on exports.
The foreign ministry said that by strengthening ties with the EU, Japan hopes to vitalise mutual direct investment, fight other global trends toward protectionism and enhance the stature of Japanese brands.
The EU said the trade liberalisation will lead to the region's export growth in chemicals, clothing, cosmetics and beer to Japan, leading to job security for Europe. Japan will get cheaper cheese, such as Parmesan, gouda and cheddar, as well as chocolate and biscuits.
Japanese consumers have historically coveted European products, and a drop in prices is likely to boost spending.